Personal tax in Canada
Understand tax residence, federal and provincial brackets, and how Canada taxes your salary, investments, dividends and gifts.
How Canadian personal tax works
Taxation basis: worldwide income. While you are a Canadian tax resident, Canada generally taxes income from Canada and abroad, even if the money stays overseas. Non-residents are generally taxed only on specified Canadian-source income. Foreign-tax credits and treaties can reduce double taxation.
Canada charges personal income tax at two levels: federal, plus the province or territory where you are resident. Both generally use progressive brackets: each slice of taxable income has its own rate.
The Canada Revenue Agency (CRA) is the federal tax authority. It processes returns, collects tax and administers benefits. For most provinces and territories, one CRA return calculates both levels. Québec residents also file a provincial return with Revenu Québec.
Add taxable income
Salary, business profit, rent, interest and the taxable amounts of investments enter the calculation. Tax residents generally include foreign income too.
Subtract deductions
Eligible deductions reduce taxable income. For example, a deductible retirement-plan contribution reduces the amount to which the brackets apply.
Apply rates, then credits
Calculate federal and provincial tax separately, then apply the relevant credits. Tax already withheld from pay reduces the balance left to pay.
Details & sources
For a continuing resident, provincial tax normally follows residence on 31 December. Moves into or out of Canada and business income earned through permanent establishments in several provinces can require different allocations.
The calendar year runs from 1 January to 31 December. Pension and employment-insurance contributions are separate from income tax; use the salary calculator to see those deductions.
Are you a Canadian tax resident?
Start with where you actually live and keep your home and family. Spending fewer than 183 days in Canada does not, by itself, make you nonresident. A Canadian passport or immigration permit does not settle the question either.
Do you maintain a settled life in Canada?
The strongest connections are a home available to you in Canada, a spouse or common-law partner here, and dependent children or other dependants here. Establishing or keeping these ties can make you a factual resident even while you work abroad.
- A retained family home and spouse in Canada usually point toward continuing residence.
- A home rented to an unrelated tenant on genuine arm’s-length terms may carry less weight if it is no longer available to you.
- Bank accounts, a driving licence, provincial health coverage and social or business ties are considered together. One bank account is not an automatic residency test.
If you are not factually resident, did you stay here for 183 days or more?
Temporary stays adding up to at least 183 days in one calendar year can make you a deemed resident for that whole year. This is a separate rule for someone who has not established ordinary residence; it is not a safe harbour for everyone below 183 days.
Does another country also treat you as resident?
If a tax treaty applies, use its residence tie-breaker. The usual sequence is permanent home, then closer personal and economic ties, then habitual abode, then nationality, and finally agreement between the authorities. Stop when the applicable treaty resolves the tie. A result in favour of the other country can make you deemed nonresident of Canada.
Identify when the status starts or ends
On arrival, residence usually starts when you establish your Canadian home and residential ties. On departure, leaving on a flight is not enough if your settled life remains here. Establishing a home abroad and severing Canadian ties can end residence; the treaty may change that result.
| Situation | Likely starting position |
|---|---|
| Work abroad; Canadian home remains available and spouse lives there | Factual resident, even with few days in Canada. Check any applicable treaty. |
| Visit for 200 days; no settled Canadian home or family ties | Potential full-year deemed resident. A treaty can override the result. |
| Live abroad, no significant Canadian ties, short visits under 183 days | Generally nonresident, unless a special deemed-residence rule applies. |
| Move the household to Canada partway through the year | Usually part-year residence from the date ties are established. |
Details & sources
These examples illustrate the tests, not binding determinations. A home, family arrangement or treaty can change the result. Special rules cover certain government employees and Canadian Forces members abroad.
For the 183-day sojourning rule, the purpose and nature of a stay matter; not every cross-border presence, such as a daily commute to work, is necessarily a sojourn. Keep a dated travel record.
CRA generally places departure at the latest of leaving Canada, your spouse/partner and dependants leaving, and becoming resident in the new country, subject to exceptions. Read the departure guidance for returning residents and other special situations.
You can request CRA’s opinion using form NR74 when entering or NR73 when leaving. The facts establish tax status; submitting a form is not what makes a person resident or nonresident.
2026 federal & provincial tax brackets
Read each table as a series of slices, not a single rate on your whole income. Federal tax and the selected province’s tax are calculated separately. All thresholds below are annual taxable income in Canadian dollars.
Federal · all provinces & territories
| Taxable-income slice (CAD) | Rate |
|---|---|
| Up to $58,523 | 14% |
| Over $58,523 to $117,045 | 20.5% |
| Over $117,045 to $181,440 | 26% |
| Over $181,440 to $258,482 | 29% |
| Over $258,482 | 33% |
Alberta · 2026 brackets
| Taxable-income slice (CAD) | Rate |
|---|---|
| Up to $61,200 | 8% |
| Over $61,200 to $154,259 | 10% |
| Over $154,259 to $185,111 | 12% |
| Over $185,111 to $246,813 | 13% |
| Over $246,813 to $370,220 | 14% |
| Over $370,220 | 15% |
Alberta: personal income tax · CRA T4127, January 2026, 122nd edition
British Columbia · 2026 brackets
| Taxable-income slice (CAD) | Rate |
|---|---|
| Up to $50,363 | 5.6% |
| Over $50,363 to $100,728 | 7.7% |
| Over $100,728 to $115,648 | 10.5% |
| Over $115,648 to $140,430 | 12.29% |
| Over $140,430 to $190,405 | 14.7% |
| Over $190,405 to $265,545 | 16.8% |
| Over $265,545 | 20.5% |
British Columbia: personal income tax rates · British Columbia: basic personal credits and tax reduction
Manitoba · 2026 brackets
| Taxable-income slice (CAD) | Rate |
|---|---|
| Up to $47,000 | 10.8% |
| Over $47,000 to $100,000 | 12.75% |
| Over $100,000 | 17.4% |
Manitoba Income Tax Act · CRA Manitoba payroll information for January 2026
New Brunswick · 2026 brackets
| Taxable-income slice (CAD) | Rate |
|---|---|
| Up to $52,333 | 9.4% |
| Over $52,333 to $104,666 | 14% |
| Over $104,666 to $193,861 | 16% |
| Over $193,861 | 19.5% |
CRA T4127, January 2026, 122nd edition · CRA 2026 annual federal and provincial income tax rates
Newfoundland and Labrador · 2026 brackets
| Taxable-income slice (CAD) | Rate |
|---|---|
| Up to $44,678 | 8.7% |
| Over $44,678 to $89,354 | 14.5% |
| Over $89,354 to $159,528 | 15.8% |
| Over $159,528 to $223,340 | 17.8% |
| Over $223,340 to $285,319 | 19.8% |
| Over $285,319 to $570,638 | 20.8% |
| Over $570,638 to $1,141,275 | 21.3% |
| Over $1,141,275 | 21.8% |
Newfoundland and Labrador: personal income tax · CRA T4127, July 2026, 123rd edition
Northwest Territories · 2026 brackets
| Taxable-income slice (CAD) | Rate |
|---|---|
| Up to $53,003 | 5.9% |
| Over $53,003 to $106,009 | 8.6% |
| Over $106,009 to $172,346 | 12.2% |
| Over $172,346 | 14.05% |
CRA T4127, January 2026, 122nd edition · CRA 2026 annual federal and provincial income tax rates
Nova Scotia · 2026 brackets
| Taxable-income slice (CAD) | Rate |
|---|---|
| Up to $30,995 | 8.79% |
| Over $30,995 to $61,991 | 14.95% |
| Over $61,991 to $97,417 | 16.67% |
| Over $97,417 to $157,124 | 17.5% |
| Over $157,124 | 21% |
Nova Scotia: personal tax rates and indexation · CRA T4127, January 2026, 122nd edition
Nunavut · 2026 brackets
| Taxable-income slice (CAD) | Rate |
|---|---|
| Up to $55,801 | 4% |
| Over $55,801 to $111,602 | 7% |
| Over $111,602 to $181,439 | 9% |
| Over $181,439 | 11.5% |
CRA T4127, January 2026, 122nd edition · CRA 2026 annual federal and provincial income tax rates
Ontario · 2026 brackets
| Taxable-income slice (CAD) | Rate |
|---|---|
| Up to $53,891 | 5.05% |
| Over $53,891 to $107,785 | 9.15% |
| Over $107,785 to $150,000 | 11.16% |
| Over $150,000 to $220,000 | 12.16% |
| Over $220,000 | 13.16% |
CRA Ontario payroll information for January 2026 · CRA T4127, January 2026, 122nd edition
Prince Edward Island · 2026 brackets
| Taxable-income slice (CAD) | Rate |
|---|---|
| Up to $33,928 | 9.5% |
| Over $33,928 to $65,820 | 13.47% |
| Over $65,820 to $106,890 | 16.6% |
| Over $106,890 to $142,520 | 17.62% |
| Over $142,520 to $200,000 | 19% |
| Over $200,000 | 20% |
Prince Edward Island: provincial personal income tax · Prince Edward Island Income Tax Act
Québec · 2026 brackets
| Taxable-income slice (CAD) | Rate |
|---|---|
| Up to $54,345 | 14% |
| Over $54,345 to $108,680 | 19% |
| Over $108,680 to $132,245 | 24% |
| Over $132,245 | 25.75% |
Revenu Québec: employer changes for 2026 · Revenu Québec TP-1015.F-V, 2026 formulas
Saskatchewan · 2026 brackets
| Taxable-income slice (CAD) | Rate |
|---|---|
| Up to $54,532 | 10.5% |
| Over $54,532 to $155,805 | 12.5% |
| Over $155,805 | 14.5% |
CRA T4127, January 2026, 122nd edition · CRA 2026 annual federal and provincial income tax rates
Yukon · 2026 brackets
| Taxable-income slice (CAD) | Rate |
|---|---|
| Up to $58,523 | 6.4% |
| Over $58,523 to $117,045 | 9% |
| Over $117,045 to $181,440 | 10.9% |
| Over $181,440 to $500,000 | 12.8% |
| Over $500,000 | 15% |
CRA T4127, January 2026, 122nd edition · CRA 2026 annual federal and provincial income tax rates
Calculate salary after federal tax, provincial tax and payroll deductions
Details & sources
The brackets show tax before credits, reductions and additional charges. Ontario adds surtax and a health premium. Québec normally reduces basic federal tax by a 16.5% abatement; its provincial taxable-income calculation can also differ.
These are full-year 2026 rates, not the catch-up rates used on some second-half payroll tables. British Columbia’s annual first rate is 5.60%; Prince Edward Island adds a 20% band above $200,000.
Manitoba’s current legislation and detailed payroll guidance use $47,000 and $100,000 thresholds. The CRA summary table shows different indexed figures; this guide follows Manitoba’s legislation.
What goes into taxable income?
| Income or receipt | Usual treatment for a resident individual |
|---|---|
| Salary and taxable employment benefits | Generally included in full. Payroll withholding is an advance payment toward the annual bill. |
| Self-employment and rental income | Generally taxed on net profit after allowable expenses, not gross revenue. |
| Bank interest and foreign dividends | Generally included in full. A foreign tax credit may offset qualifying foreign tax. |
| Capital gains on investments | Normally half of the gain enters taxable income. See the example below. |
| Canadian taxable dividends | An increased taxable amount and dividend tax credits apply. Eligible and non-eligible dividends differ. |
| Genuine personal cash gifts and inheritances | Usually not income to the recipient. Gifts of appreciated property can create tax for the giver. |
Details & sources
Registered accounts have their own rules. A Tax-Free Savings Account (TFSA) can shelter eligible investment income; a Registered Retirement Savings Plan (RRSP) generally gives a deduction for eligible contributions and taxes withdrawals. Contribution limits and nonresident rules matter.
A business of trading assets can produce fully taxable business profit rather than capital gains. Employment payments, shareholder benefits and trust distributions are not made tax-free simply by calling them gifts.
Capital gains: tax the profit, not the sale price
A capital gain is normally the sale proceeds minus your tax cost and selling expenses. For an ordinary investment gain, 50% of that profit is added to taxable income. Your income-tax rates apply to that included amount.
- A loss on an investment normally offsets taxable capital gains, not salary. Unused net capital losses can generally go back three years or forward indefinitely.
- A qualifying principal residence can be exempt, but the sale must still be reported. A rental property, cottage or flipped property does not automatically get that exemption.
- Moving to Canada can reset the tax cost of covered assets to their arrival market value. Canadian real estate and other excluded assets need separate treatment.
Details & sources
The proposed increase in the inclusion rate was cancelled. The general one-half inclusion rule is the current baseline checked for this guide.
Business trading, superficial losses, depreciation recapture, employee options and special exemptions follow additional rules. Large gains can also trigger alternative minimum tax.
For foreign investments, calculate cost and proceeds in Canadian dollars at the relevant dates; an exchange-rate change can create a Canadian-dollar gain even if the foreign-currency price is unchanged.
Dividends: Canadian and foreign payments work differently
A Canadian company may already have paid corporation tax on the profit it distributes. The personal tax system accounts for that through two steps: increase the reported dividend (the “gross-up”), then deduct a dividend tax credit. You do not receive the grossed-up amount as cash.
| On a $1,000 cash dividend | Eligible Canadian dividend | Non-eligible Canadian dividend | Foreign dividend |
|---|---|---|---|
| Amount added to taxable income | $1,380 | $1,150 | $1,000 gross, before foreign withholding |
| Federal dividend tax credit | About $207.27 | About $103.85 | None |
| Provincial treatment | Provincial dividend credit also applies | Different provincial dividend credit applies | A qualifying foreign tax credit may apply |
| How to identify it | Payer designates it eligible; shown on the tax slip | Tax slip identifies the other-than-eligible amount | Paid by a foreign corporation; convert to CAD |
Details & sources
For eligible dividends, the gross-up is 38% and the federal credit is 6/11 of that gross-up. For non-eligible dividends, the gross-up is 15% and the federal credit is 9/13 of that gross-up.
Foreign dividends are reported before foreign withholding. A $1,000 dividend with $150 withheld generally means $1,000 of income, not $850; a foreign tax credit is a separate calculation.
The grossed-up amount can affect income-tested benefits. Private-company dividends paid to family members can also trigger tax-on-split-income rules.
Gifts: usually no tax on cash received, but assets are different
| What happens | Canadian tax consequence |
|---|---|
| Parent gives an adult child $50,000 cash | A genuine personal gift is usually not taxable income to the child. The parent generally gets no deduction. |
| Parent gives an adult child shares worth $80,000 with a $40,000 tax cost | The giver is generally treated as selling at $80,000: a $40,000 capital gain even though no cash was received. The child generally starts with an $80,000 tax cost. |
| Property is transferred to a spouse or common-law partner | A qualifying transfer can roll over at tax cost, deferring the gain. Later investment income and gains may still be attributed back to the giver. |
| Cash or investments are given to a related child under 18 | Interest and dividends may be taxed back to the giver. Ordinary capital gains generally follow different attribution rules. |
| Donation to a registered charity or other qualified donee | A valid receipt can support a donation tax credit. This is different from a personal gift to a relative. |
Details & sources
The shares example assumes an ordinary capital investment, no exemption or special rollover, and both parties’ circumstances support the general rules. A gift can also create land-transfer, foreign or other taxes.
Spousal and minor-child attribution rules have exceptions; trusts and private-company shares add further rules. Keep evidence of the gift, the giver and the asset’s value.
An inheritance is usually not income to the beneficiary, but the deceased person or estate can have tax on gains and registered-plan income. Canada’s treatment does not remove a foreign country’s gift or estate tax.
Retirement and tax-advantaged accounts
These are tax wrappers for savings and investments, not investments themselves. Eligibility, contribution room and withdrawal rules differ. Canadian tax relief is not automatically recognised by another country where you are tax resident.
| Account | Contribution and room | Growth and withdrawals |
|---|---|---|
| Registered Retirement Savings Plan (RRSP) | Deductible contributions within your personal deduction limit. New room generally uses 18% of prior-year earned income, capped at $33,810 for 2026, with pension adjustments and unused room affecting the result. | Growth is generally deferred; ordinary withdrawals are taxable income. Use your notice of assessment for your personal limit. |
| Tax-Free Savings Account (TFSA) | No deduction. The 2026 annual limit is $7,000, plus available unused room. Generally age 18+ with a valid Social Insurance Number; room accrues for eligible resident years. | Growth and withdrawals are generally tax-free in Canada. Withdrawals restore room the next calendar year, not immediately. |
| First Home Savings Account (FHSA) | $8,000 room starts in the year you open your first account; $40,000 lifetime limit. Contributions are generally deductible. Opening requires Canadian residence and first-time-home-buyer eligibility. | Qualifying home-purchase withdrawals are tax-free. Non-qualifying withdrawals are generally taxable; eligible transfers to retirement plans have different treatment. |
| Registered Education Savings Plan (RESP) | No contribution deduction; $50,000 lifetime contribution limit per beneficiary. Education grants have separate eligibility and limits. | Contributed capital can generally come out tax-free. Educational assistance payments of growth and grants are normally taxable to the student. |
Details & sources
A newcomer does not get TFSA room for earlier years of non-residence or automatically receive the full RRSP annual cap. Non-resident TFSA contributions can attract a 1% monthly tax. CRA account balances can lag contributions, so keep your own records.
FHSA first-time-buyer tests consider ownership and occupation during the current year before opening and the preceding four calendar years, including relevant spouse or partner ownership. Unused annual participation room carried forward is limited to $8,000. Transfers from an RRSP are not deductible again.
Trusts: residence, income and distributions
A trust holds property for beneficiaries under duties carried out by its trustees. Canadian tax looks at the trust, its contributors and its beneficiaries separately; using a foreign trustee does not by itself remove Canadian tax.
| Question | Canadian starting rule |
|---|---|
| Where is the trust resident? | Usually where its real central management and control takes place, which can be different from the trustee’s address. Special rules can deem a foreign trust resident where Canadian contributors or beneficiaries are involved. |
| Income retained in a resident trust | Generally taxed on worldwide income at the highest personal federal rate, 33%, plus provincial tax. Qualifying graduated rate estates and qualified disability trusts can use graduated rates. |
| Income paid or payable to beneficiaries | Generally deductible by the trust and taxable to the beneficiary, subject to allocation and attribution rules. A capital distribution is not automatically treated like an income distribution. |
| The 21-year rule | Many trusts are treated as selling and reacquiring certain capital assets at market value every 21 years. This can trigger tax on unrealised gains without a cash sale. Exceptions and different triggering dates apply to some trusts. |
| Foreign trusts and distributions abroad | Canadian attribution, deemed-residence, withholding and information-reporting rules can still apply. The residence of each person and the trust’s terms matter. |
Details & sources
A graduated rate estate is a qualifying estate within 36 months after a person’s death. A qualified disability trust must meet its own annual conditions. Trust returns and beneficial-ownership reporting depend on the trust type and tax year; a trust with no tax payable may still need to report.
Tax withheld from payments
Withholding means the payer deducts tax before you receive the money. Sometimes it is an advance towards your annual tax bill; sometimes it is Canada’s final tax on that payment. Your tax residence and the kind of income determine which applies.
| Payment to you | How Canadian withholding usually works |
|---|---|
| Employment income while resident | Payroll deductions are credited against the tax calculated on your annual return. They are not a separate flat tax. |
| Canadian dividends, rent or pension payments while non-resident | The domestic starting rate is generally 25% on taxable gross payments. Treaty reductions, domestic exceptions and certain elections can change this. |
| Ordinary interest from an independent Canadian payer while non-resident | Generally exempt; related-party and profit-linked interest need separate checks. |
| Fees for non-employment services physically performed in Canada while non-resident | Generally 15% of gross fees is withheld as an advance, with possible waiver or refund procedures. |
| Foreign investment income while Canadian resident | The foreign country may withhold its own tax. You generally report the gross income in Canada and may claim a foreign-tax credit, subject to limits. |
Details & sources
A treaty rate depends on tax residence, beneficial ownership and the specific income article. Give the payer the appropriate treaty-residence declaration rather than assuming nationality establishes eligibility. Rental-income and pension elections can change the final Canadian calculation.
Canada’s tax treaty partners
Treaties can reduce withholding, resolve dual residence and help prevent double taxation. Eligibility depends on your tax residence and the income involved, not simply citizenship.
94 partners listed · checked 15 October 2026
- Algeria
- Argentina
- Armenia
- Australia
- Austria
- Azerbaijan
- Bangladesh
- Barbados
- Belgium
- Brazil
- Bulgaria
- Cameroon
- Chile
- China (People’s Republic)
- Colombia
- Croatia
- Cyprus
- Czech Republic
- Denmark
- Dominican Republic
- Ecuador
- Egypt
- Estonia
- Finland
- France
- Gabon
- Germany
- Greece
- Guyana
- Hong Kong
- Hungary
- Iceland
- India
- Indonesia
- Ireland
- Israel
- Italy
- Ivory Coast
- Jamaica
- Japan
- Jordan
- Kazakhstan
- Kenya
- Kuwait
- Kyrgyzstan
- Latvia
- Lithuania
- Luxembourg
- Madagascar
- Malaysia
- Malta
- Mexico
- Moldova
- Mongolia
- Morocco
- Netherlands
- New Zealand
- Nigeria
- Norway
- Oman
- Pakistan
- Papua New Guinea
- Peru
- Philippines
- Poland
- Portugal
- Romania
- RussiaSuspended
- Senegal
- Serbia
- Singapore
- Slovak Republic
- Slovenia
- South Africa
- South Korea
- Spain
- Sri Lanka
- Sweden
- Switzerland
- TaiwanIn-force arrangement
- Tanzania
- Thailand
- Trinidad & Tobago
- Tunisia
- Turkey
- Ukraine
- United Arab Emirates
- United Kingdom
- United States
- Uzbekistan
- Venezuela
- Vietnam
- Zambia
- Zimbabwe
No matching treaty partner.
Status, exceptions & official sources
Russia: the agreement has been suspended since 18 November 2024. Do not apply its former reduced rates as though it remained operative. Taiwan is covered by a tax arrangement, listed separately from treaties. The agreement with China does not cover Hong Kong, which has its own agreement.
Signed but not yet in force: Lebanon and Namibia. Belgium’s 2014 amending protocol is also pending; the existing Belgium treaty remains in force.
Negotiations or renegotiations are listed for Australia, Brazil, China, Germany, Malaysia, the Netherlands, Qatar, San Marino, Saudi Arabia and Switzerland. Negotiations do not themselves create a treaty or cancel an existing one.
Department of Finance treaty status and text directory
Rates are not uniform across treaties. Read the relevant treaty, effective dates and amendments before applying a reduction. Tax-information-exchange agreements are a separate category and do not, by themselves, grant income-tax treaty withholding rates.
Tax year and filing dates
| Item | Usual rule |
|---|---|
| Personal tax year | 1 January to 31 December. |
| Tax return | Generally due 30 April of the following year. |
| If you or your spouse / partner are self-employed | The filing deadline is generally 15 June of the following year; the tax balance is still generally due 30 April. |
| Arriving or leaving during the year | Generally report worldwide income for the resident portion of the year and applicable Canadian-source income for the non-resident portion. |
| Provincial income tax | Generally determined by your province or territory of residence on 31 December. Part-year, business-income and other special cases can differ. |
Details & sources
Deadlines can move where they fall on a weekend or recognised public holiday. Instalments may be required during the year; filing a return and paying the balance are separate obligations.
Moving, foreign assets & filing
While you are resident
Generally report worldwide income, including foreign accounts and investments. Foreign tax credits can reduce double taxation, subject to limits.
When you leave
Departure can trigger tax on a deemed sale of certain assets. Canadian rent and other Canadian-source income can remain taxable after nonresidence.
Foreign asset reporting
Form T1135 can be required when specified foreign property costs more than CAD100,000 in total at any time in the year. This is a reporting threshold, not a tax-free allowance.
Details & sources
T1135 has exclusions, including personal-use property and assets held in registered plans. An individual generally does not file it for the year they first become resident; foreign income may still have to be reported.
Returns are generally due 30 April following the tax year. Most self-employed individuals and their spouses have until 15 June to file, but any balance is generally still due 30 April. Instalments may also be required.